A Comparison of Approaches for Setting Standards for Technological Products

Abstract

It is widely believed that setting industry‐wide standards of uniformity for technological products hastens their diffusion. In this article, Barry Rosen, Steven Schnaars and David Shani examine whether standards merely make markets less competitive, or whether they promote economic growth through the accelerated diffusion of certain new products. The authors also examine conditions which are most conducive to setting standards and reflect on alternative approaches to achieving technical standards. Finally, they ask who should set industry standards? The article presents opposing arguments for allowing industry to cooperate in the setting of standards and for letting the marketplace be the ultimate arbiter of standards—acting to weed out the weak and promote the strongest technological entry.